Ellis Street is reflected in the windows of Modernism gallery, where Gottfried Helnwein paintings can be seen on the walls.

2017, Photo: Gabrielle Lurie, The Chronicle

Ellis Street is reflected in the windows of Modernism gallery, where Gottfried Helnwein paintings can be seen on the walls.

Ask someone who hasn’t been to the Tenderloin lately to meet you there, and they’re apt to have one of two reactions — excitement or the side-eye. Why? The long-sketchy neighborhood is the city’s newest hot spot.Business owners priced out of Union Square (up to $1,000 per square foot), SoMa, the Mission and Mid-Market are finding opportunities in the Tenderloin, which real estate experts consider a well-located neighborhood ripe for redevelopment (at $40 per square foot and climbing).A decade ago, an interior design firm and a few restaurateurs took a chance and planted roots, followed by a few others, but momentum surged in 2016 with the openings of Onsen, a Japanese bath house; the boutique Tilden Hotel; Hero Shop women’s clothing; Black Cat, Biig, and Rum & Sugar cocktail bars; the Halal Guys and the Saratoga restaurants; and in February, Modernism Inc. gallery.

The wave has yet to crest, with Meraki Market, an upscale grocery; Locol, a healthy fast food chain; and several housing developments still to come.The result? Streets are bustling with upscale activities right alongside the challenges of urban living and homelessness — symbolic of what’s going on across San Francisco today.Here’s what some business owners and activists have to say about the risks and rewards in the changing Tenderloin. (Interviews edited for length.)

Martin Muller, Modernism Inc. gallery, opened Feb. 9:

The transformation of South of Market over the last 35 years, which
then shifted to the Mission District, which shifted to Bernal Heights
and now has started to take place in the Tenderloin, is very much like
what took place in New York. There, you had Soho, which became a place
offering the world of the arts at large, and fashion by extension, and
once Soho became highbrow, there was a shift toward the East Village,
and then Chelsea, and then the new place to be explored became the
Meatpacking District. The Tenderloin is really the last bastion of
opportunity from a real estate point of view in San Francisco for people
who are interested in good opportunities, growth potential and to play
their part in terms of participating in the cultural life of San
Francisco, right within the city limits.